Companies That Sue Critics Have Something to Hide

I am a firm believer that companies that sue critics (whether the critics are journalists, customers, forensic accountants, or otherwise) have something to hide.

This was the case with Medifast Inc., a multi-level marketing company that sued me (and others) for $270 million nearly five years ago. (They suffered a resounding loss against me, lost again on appeal, and now must pay my substantial attorneys fees… which of course they are claiming are inflated…. disregarding the fact that huge fees are a result of the need to defend against their shady litigation tactics.) Medifast didn’t like the fact that I expressed my opinion of its business model and business practices.

Other companies have tried such tactics:

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Truth About MLM: Almost Everyone Will Lose Money

Last week the Salt Lake Tribune published a fantastic article about the reality in multi-level marketing, entitled Utah Juice Companies Offer Few Prospects. MLMs like Mary Kay, Amway, MonaVie, and Herbalife have been claiming that the great recession has increased the number of distributors because people are looking for ways to make money during this time of high unemployment. The problem with this claim is that while more people are signing up for these bogus business opportunities, almost no one is actually profiting from their activities.

Multilevel marketing companies like to refer to themselves as “direct sales” companies. They want to keep the focus off recruiting and onto selling of the products directly to customers. The problem is that little actual retail sales occur for a number of reasons:

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MonaVie Lawyers Are Again Threatening Critics

These stories never get old. People criticize multi-level marketing in general, and particular MLMs specifically, and the lawyers come running. They cry that the bloggers are saying bad things about their companies, and that can’t be allowed to happen. Mona Vie doesn’t want you to know that their distributors are losing money left and right and the overall financial health of the company is being questioned.

None of the MLMs want us saying anything bad about the companies, especially if it’s true and might harm their recruiting efforts.

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Mona Vie: Don’t Use Our Name in Your URL, Unless You’re Wikipedia (and We’re Doing the Editing)

Earlier this week I wrote about the MonaVie lawyers going after bloggers who do unflattering critiques of the company. Their premise was silly: You can’t use our name in a URL. Here’s exactly what they said in their threatening letter to blogger “Lazy Man”:

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Here Come the MonaVie Lawyers…

When will companies learn? Trying to silence critics of them with bogus threats of legal action just isn’t effective. We have something called “freedom of speech” here which guarantees us the right to speak our minds, so long as we’re being truthful. Yet that doesn’t stop multi-level marketing companies from trying to bully their critics.

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Massive MonaVie Distributor Losses Demonstrated With the Company’s Own Numbers

Multi-level marketing expert Robert Fitzpatrick discusses the phenomenon of high-level MLM distributors going from company to company. He also explains some distributor numbers released by MonaVie, which show that 91% of distributors receive no commissions from the company, and that the bottom 99% of distributors receive an average of $3.75 a week in commissions. Doesn’t sound like much of an earnings opportunity to me!

From Robert’s blog:

Read moreMassive MonaVie Distributor Losses Demonstrated With the Company’s Own Numbers

MonaVie: Scam or Not?

The scheme: Typical multi-level marketing company, using the guise of “direct sales” to make the business look like a legitimate retail venture. The reality is that it’s nothing more than a recruiting scheme like Usana, Mary Kay, Arbonne, PrePaid Legal, Primerica, Herbalife, United First Financial, and so many other companies that make big promises to members, but provide little actual reward to 99%.

The founder: Dallin Larsen founded MonaVie. He used to work for Usana Health Sciences, and actually helped found Usana. He helped grow the associates to 70,000 and helped make up the compensation plan. Then he ditched out and started his own company

The product: Acai berry juice plus other fruit juices. I like to call this “magic berry juice.” It supposedly cures whatever ails you and there’s never been anything quite like it on the market. If you study multi-level marketing companies, you will see that one very common characteristic is some unique/special product that is hard to find and has never been offered before.

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